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Want to Rent Your Current Home Out and Move? Now, it’s Better!

In a change that signifies that Fannie Mae thinks the economy has recovered, they are now allowing 75% of the rental income on a NEW lease for a current home without needing 30% equity any longer.
This means as long as the homeowner has an executed lease with security deposit and first month’s rent, 75% of the income can be counted in their qualifying.

They have also reduced the reserves from 6 months to 2 months for each property.

This means that you can now pack your bags and not worry but make sure you get preapproved by going to http://theloanapp.com

Top Reasons The Real Estate Market Could Crash Soon

Crash? Don’t be alarmed. Don’t sell your business, but realize that the economic structure and outside occurrences can shape a real estate market.

 

I am a normally upbeat guy, but I do like realism. We have to step away from being happy all the time to an honest view for our clients — both sellers and buyers.

Here are the top reasons that the real estate market could fail soon, in no particular order:

11. Rates are dropping. What? Aren’t rates dropping a good thing? Actually, no. The market is telling us based on macroeconomic reports that the economy is not cooking and jobs are not being created to make people buy homes. The only good news that will come from this is that those who forgot to refi, especially the HARP2 eligible, will be able to get better rates. Speaking of HARP, it’s being reported that FHFA Director Mel Watt may waive the eligibility date!

10. Robots. CNBC did a report called “Robots Rising” highlighting the fact that robots will continue to take over human jobs. Simple. No job, no house to buy. Also, 3-D printers are all the rage. Instead of ordering a part for your car that has to be manufactured by someone, you or your mechanic will just hit “print” and voila, you have your part!

9. 43*. No, it’s not about a home run record. It’s the magic arbitrary number that the people at the Consumer Finance Protection Bureau (CFPB) felt would be the maximum debt-to-income ratio for mortgages under the Dodd-Frank “qualified mortgage” rule. So let’s see. There are no more “no docs,” no more option ARMs, practically no more interest-only rules, but they felt that 43 percent of your income should be the maximum for your mortgage payment plus other qualified debt.

The crappy liar loans of the past decade are gone. Guess what, you actually have to qualify for a loan now!

You can’t get your favorite character from ‘Goodfellas’ to put a gun to someone’s head and force them to buy a house.”

Why the asterisk? There was a seven-year “exception” to that rule if your loan got approved in the Fannie Mae or Freddie Mac computer system with a higher ratio than 43. Sounds great, right? Here’s the problem. If a lender gets a computer approval for more than 43 percent and makes the loan, Fannie or Freddie can come in an audit the file. If they find that there was one T not crossed, they can claim the loan is NOT QM exception compliant, make the loan worthless on the secondary market and possibly make you buy it back.

So, that leads to the big boys in mortgageland, the banks and the big mortgage bankers along with the brokers — the only ones left in the business since the small/middle-sized mortgage bankers would be killed if they started having to buy loans back.

What does that mean? Higher rates to compensate for the lawyers they will have to hire to protect them against the 30,000 auditors who work for the agencies. Or, it could mean that fewer and fewer companies would be interested in being in the mortgage business resulting in loss of jobs all over the country and more people unemployed.

It also comes down to decisions made by who I will call Mister 43*, Raj Date. We will hear about him later!

8. 580 credit score with 3.5 percent down and 50 percent ratio. Yes, folks, the same CFPB that decided on 43 has let the FHA do 3.5 percent downs with 580 credit scores and 50 percent ratios! Talk about disaster! What will happen is that more and more and more deals will go FHA and because of the low scores, there will be defaults. Inconstancy in underwriting standards where the people with bad credit get high loan-to-value loans and the person with great credit and a lot down may not get a mortgage at all. Oh, and I don’t want to forget, FHA has lowered just about all the maximum loan amounts around the country shutting out many potential homebuyers (and refinancers). DUMB.

7. Flood insurance. You think the mortgage market makes no sense, let’s talk about the federal flood insurance program. In 2012, a bipartisan bill passed both chambers of Congress and was signed off by President Obama giving a blueprint on restocking FEMA with much-needed funds. They just went through Katrina, Sandy and other natural disasters and were running very low on funds. But the unintended consequences amounted to people who owned $75,000 homes going from paying $400 a year to $15,000. No, you did not read that wrong. From $400 to $15,000. It’s an abomination.

A bill passed in 2014 to change this, but it is only temporary until 2017. Then, the floodgates may reopen. The Tea Party wing in Congress like Sen. Pat Toomey of Pennsylvana tried to railroad the flood bill even though many of his fellow Pennsylvanians were affected and have told him so. People of ALL parties along with real estate professionals are outraged and incoherently confused by the word no from these congresspeople.

There is a massive grassroots effort under way to knock some sense into these morons. Visit stopfemanow.com for all the details. But, if people can’t pay for their insurance, they will lose their homes, values will plummet in all 50 states, and there will be more renters and fewer sales.

6. Overregulation. Let me say, I am not an advocates for change based on the “small-business person” chant. But, this time, I am telling the good people of Washington to stop. Stop making it outrageous on people to own a business in the real estate field. In the last few years, they have overreached on mortgage brokers only to limit their income, made appraisers beg and do deals for far less dollars than they should be making, and they have forced real estate agents to lose deals and money because of the way rules have been placed on vendors. I could spend hours on this, but I urge the CFPB to find a reality-based platform to deal with the issues instead of theory from people who were never involved in the business itself.

5. Non-QM loans. The architect of the qualified mortgage rule, Mr. 43, Raj Date, who left the CFPB after the announcement and was made to start his own firm to deal with non-QM loans, is now finding that this is not as easy as he once thought. The sophisticated investors in mortgage-backed securities have not come over to his way of thinking. So, all the non-QM (I called them the new subprime loans) mortgages may not come to pass. So, let’s eliminate more buyers, hence, down go values.

4. Fed tapering. The Fed is still buying a lot of mortgage-backed securities, but, it failed the country in its leadership by implementing the aforementioned changes to mortgage and appraisals and helped to slow what could have been a faster, stronger, more favorable real estate market recovery.

Now, the Fed has handed its policies and people over to the CFPB with a pat on their derrières telling them to go get ‘em! The flavor of lunacy has not left their heads, and the Fed’s overbuying of Treasurys instead of mortgage-backs was just plain silly.

You can’t get your favorite character from ‘Goodfellas’ to put a gun to someone’s head and force them to buy a house.”

3. The stock market. The market does not think the economy will kick butt. Corporate profits will slow and then the value of stocks will diminish and people will not be able to sell as much stock to buy homes. Simple.

2. Consumer confidence. If you ignore the other items above, this is the Grand Poobah of them all. You can’t get your favorite character from “Goodfellas” to put a gun to someone’s head and force them to buy a house (Sorry, Joe Pesci). People buy homes because they feel secure in their job and want to plant roots. That’s the generic majority.

1.Employment to sales. Low job creation at the same time sales are skyrocketing is saying that it MUST come to an end. Good jobs are not being created at an alarming pace. Therefore, prices have to crash. And yes, there are the “stupid” markets such as San Francisco, New York City, the Westside in Los Angeles, but for a place that is dependent on regular W-2 jobs from large companies, this can be the killer.

So what’s the solution? Ahhhh, that’s going to take more coffee!

The Flood Of Political Reality

Thanks to the Senate and all the people that helped push the Senate to pass the first step of the reform to Biggerts-Waters 12. Now, the focus is now on the House of Representatives. We need a head count.

There are 180 members that are for the bill that we know. We need 218 votes to approve. That 38 more yeas.After that, the White House is not on board. We need to send to the White House our concerns.

In order to get this through, the WH and probably the House will need to offset the subsidy with other spending.

These are the hard choices that politicians make. this is where negotiation and diplomacy takes over. Senator Mary Landrieu of Louisiana will be earning her stripes to convince her peers and the President that the flood nightmare that affects many, many Americans that can’t afford the new flood bills.

What should we offset in the federal budget to give the flood subsidy? Be prepared for compromise and maybe a loss of a benefit somewhere else. Welcome to the NFL!

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along with the fact that we rebate money to you to help you pay closing costs!

HOW TO GO MORTGAGE SHOPPING

Since we proudly are brokers, we can search the rates and programs that you need.  The bank won’t do that.We can also send
your loan to another company when the rates drop.  Your bank can’t do that!  We refund to you any lender paid yield spread over and above our margin!

It’s important that you ask for the rate and net fees for your mortgage along with asking if you can lock that rate in.

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Programs, Smart Ideas and Information

5% Conventional with 100% Gift

You can now get a loan up to $417,000 ($625,000 in California) with a gift of the 5% minimum down payment.  Previously, this was only available on FHA loans.

U S Loans Mortgage, Inc. CEO Fred Glick commented “this will help thousands of prospective homebuyers that thought they were shut out of buying a home.”

This loan is available for those with credit scores down to 620 and is available for single family, townhomes and eligible condominiums.

Please contact us at info@usloans.com or call 267-514-4630.

If you are buying a home, you MUST get a REAL PRE-APPROVAL

We pride ourselves in being one of the few companies that will get you a real Fannie Mae DO or Freddie Mac LP pre-approval.

This is the way that leading real estate agents get deals done.  Your agreement will stand out because of this approval.

Recent Short Sale?  Yes, You Can Buy!

If you have had a short sale but were current on your mortgage up until closing, you can get anew mortgage right away with FHA at U S Loans Mortgage. Call us for details at 267-514-4630

harp2.com

We have HARP 2.0 If you have no equity in your owner, second or investment property, let’s look at lowering your rate, even if you have PMI now!

FHA with 6% seller assist

Yes, it is still available.  Put 3.5% down, even as a gift and have the seller pay your closing costs.  We can help you structure your purchase!

5% DOWN HOMEPATH

We can do the Fannie Mae 5% down HomePath loans for their foreclosed properties for owner occupants, investors just 10% down.  For a list of eligible homes, please email info@usloans.com